Re:CAP Recommends | Localities will deliver the next wave of transportation investment

What: Local governments oversee the majority of the country’s infrastructure from airports to highways and are also much more attuned to local circumstances, which makes their management of infrastructure more effective. Because of this reality, local governments are often responsible for the planning of and investment in infrastructure. However, state and federal policies often place restrictions on how local governments can increase their funds for such development. This is recently exemplified through the new tax bill passed in December 2017, which caps the state taxes that can be deducted from federal taxes. Measures such as this, including state restrictions on how local governments can collect revenue, make it difficult to raise enough money for meaningful infrastructure development.

Takeaway: Due to the nature of the problem, measures that will allow local governments to improve infrastructure investment must come from the federal and state governments. In general, state and federal laws should be adjusted to allow local governments greater flexibility, so that they can better respond to local needs and raise the appropriate revenue. This will be particularly important in the next few decades, as the popularization of electric vehicles and online shopping will change where businesses and residents locate themselves and infrastructure must adjust to their needs.